Step-rate Mortgage OK for Dodd Frank?

[Mike A.]

I sold a home on a seller carry note.  I used a licensed MLO to process the application and provide the disclosures.  The terms of the loan were 10 year fixed interest rate, and then increasing 1% per year.  Starting at 7% for the first 10 years and then going up 1% per year after that up to a max of 18%.

I later read that Dodd Frank prohibits the interest rate in an ARM from increasing more than 6%. I discussed it with the loan officer but he feels that since the loan we did was a fixed rate loan, even though it's a step-rate, it's not an adjustable rate so it doesn't have to meet the ARM guidelines.

We might just be guessing at this point but I don't want to be the case law to determine the issue.... does anyone have any thoughts on whether this loan is following the Dodd Frank rules?

[Nate T.]

Good question... I was just reading a great summary of DF by @Brian Gibbons which you can see here.  I didn't see anything about step-rate loans but maybe Brian would like to comment?